In 2017, Northern Air Charter (P.R.) Inc. (Northern Air) sought Judicial Review of Alberta Health Services’ (AHS) decision to award an aviation services contract to Can-West Corporate Air Charters Ltd. (Can-West), alleging unfairness and breach of good faith. After nearly six years, Northern Air discontinued its Application for Judicial Review on the day written submissions were due. Subsequently, the Parties sought a ruling on Costs.

Justice Armstrong emphasized that under Rule 10.29, a successful party is entitled to Costs, with the Court having discretion under Rule 10.31 to determine the reasonableness of the amount. Rule 10.33(1) considers certain factors such as the outcome, degree of success, amounts claimed and recovered, and the significance and complexity of the case when assessing Costs. Rule 10.33(2) evaluates of the parties’ conduct, including any delays or misconduct. Justice Armstrong noted that settlement offers may also be considered in the analysis.

AHS sought 60% indemnification of fees, alleging Northern Air’s misconduct exacerbated the complex litigation, and requested a threefold multiplier of Schedule C. Can-West also sought Schedule C Costs due to the complexity of the litigation and double Costs for its hearing preparation. Northern Air, however, argued that the delays were cause by AHS’s late document submissions and that Schedule C Costs should apply.

The Court found that AHS and Can-West were entitled to Costs as they were entirely successful. Schedule C Costs were adequate since AHS did not provide sufficient detail to justify a percentage of incurred fees, and the complexity of the Judicial Review did not warrant exceeding those amounts. AHS’s request for a multiplier was denied, especially since Can-West, a full participant, sought Schedule C Costs without a multiplier. Justice Armstrong awarded 50% of Costs to AHS’s second counsel for managing extensive records, emphasizing that using second counsel should help reduce overall costs. Additionally, since Northern Air abandoned the case before the hearing, the Defendants were entitled to 50% of trial preparation costs, and Costs for all four hearing days were awarded, though reduced by 50% due to the abandonment.

Justice Armstrong also assessed claims for double Costs due to unaccepted settlement offers. AHS had made a formal offer under Rule 4.24, seeking discontinuance of the Judicial Review Application in exchange for a waiver of Costs. Since Northern Air did not accept the offer and unilaterally withdrew the Application, effectively dismissing it, Armstrong J. determined that AHS was entitled to double Costs under Rule 4.29(3). Although Can-West did not make a formal offer, Armstrong J. noted that its genuine efforts to resolve the matter favourably were a factor considered under Rule 10.33(2)(h).

In summary, both AHS and Can-West were entitled to Costs based on Schedule C and the specifics of their conduct during the litigation.